02-04: Implementation of Senate Bill 193 (Producer Licensing Act)
To: All Insurance Companies, Licensed Agents, Brokers and Agencies
From: John M. Huff, Director Missouri Department of Insurance
Re: Implementation of Senate Bill 193 (Missouri Single Producer Licensing Act)
Date: June 14, 2002
Updated: February 19, 2009
In 2001 the Missouri Legislature passed Senate Bill 193 which Governor Holden signed into law. This legislation contained substantial revisions to the licensing provisions of chapter 375 of the Revised Missouri Statutes. Implementation of this act will take effect on January 1, 2003.
This bulletin outlines major provisions of the act to aid companies and licensees in understanding the revised licensing requirements under the law. This bulletin is for informational purposes only and is not intended to be an exhaustive analysis of statutory changes to the insurance code. Please review the insurance laws in their entirety to assure your compliance when transacting Missouri insurance business. You can access this bill at http://www.house.mo.gov/billtracking/bills01/bills01/sb193.htm.
Major Provisions of Senate Bill 193 (Single Producer Licensing Act)
Effective January 1, 2003
- Agent and broker licenses are combined into a single "producer" license. All individual producers will have both agent and broker authority. Producers may also represent the insured and charge fees in addition to commissions if there is proper disclosure to the insured and a written Producer's Service Agreement is executed.
- Agents/brokers will be deemed a producer with either license effective January 1, 2003. Producers will receive the new license upon the next renewal of their existing license(s) after January 1, 2003. Current renewal dates for licenses will not change (dual agent/broker licenses have the same renewal date). Existing producers will receive a new license number upon their first renewal after January 1, 2003.
- Insurance agencies currently licensed in Missouri will be deemed a business entity insurance producer effective January 1, 2003. Business entity producers will receive the new license upon the next renewal of the existing license after January 1, 2003.
- The license fee for producers and business entity producers effective January 1, 2003 will be $100. The licensing period will remain at two years.
- Mandatory prelicensing education will be eliminated. The current testing requirements for individual license applicants will remain in effect.
- Individual producers must continue to file Continuing Education Summary Forms at renewal, however the $10.00 CE filing fee has been eliminated.
- Providers of continuing education courses will be required to electronically file individual producers' CE credits directly with the Department of Insurance. Guidelines for electronic filing are under development and will be communicated directly to CE providers.
- The ninety-day grace period for renewal of a license has been eliminated effective January 1, 2003. Licenses will terminate if completed renewal documents and fees are not received by the expiration date.
- A maximum late renewal period from date of license expiration has been established at twelve months. A $25 per month penalty fee will be assessed. After twelve months, a license may not be late renewed and the previous licensee must apply for a new license.
- Limited Lines Credit License: the following insurance products may be sold with a restricted to credit license, but only if the product is written in connection with an extension of credit and only if it is written for the purpose of reducing or extinguishing that credit obligation: credit life, credit disability, credit property, credit unemployment, involuntary unemployment, mortgage life, mortgage guarantee, mortgage disability, guaranteed automobile protection (GAP) insurance, and any other form of insurance offered in connection with an extension of credit to partially or wholly extinguish that credit obligation.
- A new "personal lines" line of licensing authority has been added. Holders of this license will be authorized to write personal lines property and casualty insurance for individuals and families for primarily non-commercial purposes. An examination will be required for this license as well as continuing education for license renewal. Holders of a property and casualty license will continue to be authorized to sell personal lines insurance.
- Non resident applicants for licensure and renewal will not be required to submit a home state letter of certification if the licensee's home state participates in the NAIC Producer Data Base (PDB). Non-resident license holders should check with their home state licensing authorities to determine their participation in PDB.
- The Missouri Department of Insurance will not process agent appointments and terminations. Companies will be required to maintain an internally updated register of appointed and terminated producers. No fees will be assessed for appointments or terminations. The appointment must be recorded in the company register within thirty days of an insurer authorizing a producer to transact business on its behalf. The Insurance Department must be notified within 30 days of terminations "for cause."
- A producer will have an affirmative duty to disclose to the Department of Insurance any administrative actions taken against the producer by another governmental agency or jurisdiction and to report any criminal prosecution for a felony or a crime of moral turpitude.
- If the Department has taken no action within 25 working days of receipt of a producer license application, the application shall be deemed approved, and the applicant may act as a licensed insurance producer. This provision does not apply if the applicant has had a conviction for a felony or a crime involving moral turpitude.
Please contact the Department's Licensing Section at (573) 751-3518 should you have any questions regarding this bulletin.